The towns (well their councils) do compete for being start and finish points. Obviously it is a boost to the local economy assuming they can provide the facilities (hotels, etc).
Most of the rest of it is just the French phenomenon of "en f^ete" = on holiday or festive. Lots of fun and games along the route. Farms spelling out riders names or "Vive le Tour" in hay bales etc. I even saw a cow with a yellow cover on it today.



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